Introduction:

 What is transnational commercial law and harmonisation ( a best process to removes the
barriers inherent in national commercial transactions)
 Harmonisation instrument : hard law and soft law
Benefits

 Provide neutral law

parties want to submit their agreement to neutral rules to ensure that it does not favour
either parties. A traditional compromise approach, is submit the contract to the law of a third
country > the problem of this approach
CISG (intro of CISG>> compromise legal instrument that balances the interest of legal
traditions-in particular the common and civil law systems)

 Reduce transaction cost

prerequisite imposed by different domestic legal systems is costly to business
Cape Town Convention(intro of cape town)>>how it reduce transaction cost: governs all
aspects of the transaction can play a major role in reducing risk, and thereby reducing costs,
thus leading to a better use of resources.
UN Convention on the Use of Electronic Communications in International Contracts(intro)>>
would create universal legal uniformity and a sense of predictability thereby reduce the
transaction cost.

 Certainty
Important of certainty
New York Convention(intro)>> safeguards and facilitate the enforcement of arbitration
agreements, provides an extra measure of commercial security for the parties entering cross
border transactions. These aid in achieving certainty
CISG
reduce incentive to forum-shop because at least for the questions governed by it, constitutes
a uniform legal basis. This has highly positive effect on legal certainty

 Arbitration (conventions apply to arbitration agreement)

Important of arbitration
New York Convention, seeks to offer common legislative standard for the recognition of
arbitration agreements and court recognition.
Challenges

 Different country different interpretation of conventions

Solution: article 7 (1)CISG
 whether an arbitration clause entered into electronically meets the requirement of the
written form
UNCITRAL Working Group on Arbitration has elaborated some proposals reflecting
current practices
 conventions not cover all situations within the scope of its application
 Article 7(2) CISG
 ratification process require a series of formal steps, involve various authorities and take a
number of years to conclude.
more flexible in choosing instruments and in conceiving ways in which “hard” and “soft”
law may best supplement one another
Alternative of conventions

 PICC, PECL
Solving similar issues with CISG but more flexible
Not contrast with other law, applied as a gap filler
 UPC 600
brought uniformity to the letters of credit
benefits to seller and buyer
 Model law
Example: Model Law on International Commercial Arbitration
used as a blueprint for modernizing laws governing both commercial and non-
commercial law, as well as domestic and national legislation.
a tool specifically designed to present selected information on the interpretation and
application of the Model Law based on the large number of cases collected in the
database CLOUT
End